Bill Ackman’s publicly-traded hedge fund posted a 11% net gain in March as the billionaire investor plowed more than $2 billion into the roiling stock market.
Ackman’s Pershing Square Holdings Ltd said NAV, a key performance measure for investment companies, was $27.72 per share, up 11% in March and 3.3% year-to-date. The S&P 500 Index fell 12.5% in March and is down more than 20% this year.
At the beginning of the year, billionaire investor Ackman moved to protect the firm’s stock portfolio against coronavirus-related panic selling in markets by buying credit default swaps. Pershing Square yielded $2.6 billion from hedging its stock portfolio through the credit protection. Most of the return Ackman said last month was invested in buying more shares of the fund’s portfolio companies including, Hilton Worldwide Holdings Inc. (HLT) and Warren Buffet’s Berkshire Hathaway (BRK.A).
Ackman is upbeat about investment into infrastructure projects helping the U.S. economy recover from the repercussions of the coronavirus outbreak. In March, Pershing last month invested $500 million in Howard Hughes Corp. (HHC), one of the largest real estate development companies in the US . Last month, Alexander Goldfarb, four-star analyst at Piper Sandler downgraded Howard Hughes’ rating to Hold from Buy. Sandler’s $55 price target implies that the shares have little room for potential gains in the next 12 months. The stock is priced at $55 as of April 3.
Looking ahead, Ackman is cautiously sharing his view about the start of a recovery.
“I am beginning to get optimistic. Cases appear to be peaking in NY. Almost the entire country is in shutdown,” Ackman said in a Twitter post. “Massive stimulus is being injected globally to backfill the economy and bridge us through the crisis. Most corporations, banks, and consumers entered the crisis reasonably well capitalized.”
Ackman added that although interest rates are “extremely low there was no housing or commercial real estate overhang”.
The Pershing Square Holdings portfolio, the biggest at Ackman’s Pershing Square Capital Management firm, has $5.8 billion in assets under management.